PALO ALTO, Calif., Aug. 9 /PRNewswire-FirstCall/ -- Jazz Pharmaceuticals, Inc. today announced financial results for the quarter ended June 30, 2007.
Jazz Pharmaceuticals' net loss for the second quarter of 2007 was $39.9 million, compared to a net loss of $24.1 million for the second quarter of 2006. The net loss for the quarter ended June 30, 2007 includes other income of $4.9 million related to a decrease in the value of a preferred stock warrant liability and a charge of $17.5 million related to a previously announced settlement reached with the United States Department of Justice and other federal agencies.
Total revenues for the quarter ended June 30, 2007 were $14.3 million, compared to $11.1 million for the quarter ended June 30, 2006. The increase in total revenue resulted primarily from increased net sales of Xyrem(R) (sodium oxybate). For the quarter ended June 30, 2007, Xyrem achieved record net sales of $9.6 million. For the six months ended June 30, 2007, total revenues were $28.4 million, compared to $20.9 million for the six months ended June 30, 2006.
Research and development expenses for the quarter ended June 30, 2007 were $17.4 million, compared to $14.3 million for the quarter ended June 30, 2006. The increase was primarily due to increased spending on Phase III clinical development of JZP-6 for fibromyalgia syndrome, expenses in connection with the scale-up of commercial manufacturing for Luvox(R) CR (fluvoxamine maleate) extended-release capsules and increased headcount.
Selling, general and administrative expenses for the quarter ended June 30, 2007 were $18.2 million, compared to $13.7 million for the quarter ended June 30, 2006. The increase was primarily due to spending in preparation for the launch of Luvox CR, increased headcount, and higher expenses to support the sales force, offset in part by a reduction in legal fees.
Jazz Pharmaceuticals' unrestricted cash and cash equivalents balance as of June 30, 2007 was $148.0 million. During the quarter ended June 30, 2007, net cash used in operating activities was $16.7 million.
"We are very pleased with the continued success and growth of our commercial business," said Samuel R. Saks, M.D., Chief Executive Officer of Jazz Pharmaceuticals, Inc. "On the development side, our portfolio of product candidates continues to advance, in line with our company's mission to provide important new products for patients and caregivers."
Recent Highlights
-- Jazz Pharmaceuticals priced its initial public offering of six million
shares of its common stock and began trading on the Nasdaq Global
Market under the trading symbol "JAZZ" on June 1, 2007. Net cash
proceeds from the initial public offering were approximately $97.2
million, after deducting underwriting discounts and commissions and
estimated offering expenses.
-- In August, the U.S. Food and Drug Administration (FDA) accepted for
review the submission of the complete response by Solvay
Pharmaceuticals, Inc. to the FDA approvable letter for Luvox CR. The
PDUFA action date is December 22, 2007.
-- Jazz Pharmaceuticals achieved a clinical enrollment milestone in early
August under our agreement with UCB Pharma Limited relating to JZP-6
for fibromyalgia syndrome, which triggers a $7.5 million payment to
Jazz Pharmaceuticals.
-- Jazz Pharmaceuticals' partner, Valeant Pharmaceuticals International,
launched Xyrem in Canada on July 30, 2007. Valeant promotes Xyrem in
Canada through its specialty sales force.
-- Jazz Pharmaceuticals completed a pharmacokinetic study of JZP-2, a
product candidate for the acute treatment of panic attacks associated
with panic disorder. Based upon an initial analysis of the
pharmacokinetic data generated by the study, management expects that
this product formulation will likely be discontinued.
Jazz Pharmaceuticals will host an investor conference call and live audio webcast to discuss its quarterly results on August 9, 2007 at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time. The live webcast and press release may be accessed on Jazz Pharmaceuticals' website at http://www.jazzpharmaceuticals.com/. Please connect to the website at least 15 minutes prior to the conference call to ensure adequate time for any software downloads that may be necessary. An archived version of the webcast will be available through August 23, 2007. Investors may participate in the conference call by dialing 1-800-299-0433 in the U.S., or 1-617-801-9712 outside the U.S., and entering passcode 23108551. A replay of this call will be available until August 23, 2007 at 1-888-286-8010 (U.S.), or 1-617-801-6888 (international), using the passcode 26350949.
About Jazz Pharmaceuticals, Inc.
Jazz Pharmaceuticals is a specialty pharmaceutical company focused on identifying, developing and commercializing innovative products to meet unmet medical needs in neurology and psychiatry. For further information see http://www.jazzpharmaceuticals.com/.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements set forth above may constitute forward-looking statements about Jazz Pharmaceuticals' business, including, but not limited to, development and approval of its product candidates and future sales of its products and product candidates. These forward-looking statements inherently involve significant risks and uncertainties. For further information with respect to factors that could cause the results of Jazz Pharmaceuticals to differ materially from expectations, reference is made to the risks outlined under "Risk Factors," in the Form S-1 Registration Statement dated May 31, 2007 filed by Jazz Pharmaceuticals with the Securities and Exchange Commission, as well as Jazz Pharmaceuticals' Quarterly Report on Form 10-Q expected to be filed on or before August 14, 2007. Jazz Pharmaceuticals' actual results may differ materially from its expectations due to these risks and uncertainties. Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.
JAZZ PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Revenues:
Product sales, net $13,615 $10,454 $25,240 $20,225
Royalties, net 360 120 571 186
Contract revenue 289 500 2,541 500
Total revenues 14,264 11,074 28,352 20,911
Operating expenses:
Cost of product sales 1,679 1,754 3,682 3,323
Research and development 17,407 14,280 32,274 27,174
Selling, general and
administrative 18,175 13,716 32,514 25,935
Amortization of intangible
assets 2,287 2,400 4,649 4,800
Provision for government
settlement 17,469 - 17,469 -
Total operating expenses 57,017 32,150 90,588 61,232
Loss from operations (42,753) (21,076) (62,236) (40,321)
Interest income 1,300 591 2,391 1,172
Interest expense (3,314) (3,769) (6,582) (7,546)
Other income, net 4,904 120 1,835 182
Gain on sale of product
rights - - 5,145 -
Net loss (39,863) (24,134) (59,447) (46,513)
Beneficial conversion
feature - - - (3,501)
Loss attributable to common
stockholders $(39,863) $(24,134) $(59,447) $(50,014)
Loss per share attributable
to common stockholders,
basic and diluted $(5.27) $(2,194.00) $(15.59) $(5,001.40)
Weighted-average common
shares used in computing
loss per share attributable
to common stockholders,
basic and diluted 7,561 11 3,813 10
Non-GAAP net loss per share
information (1):
Loss attributable to common
stockholders $(39,863) $(24,134) $(59,447) $(50,014)
Weighted-average shares
used in computing non-GAAP
net loss per share 19,771 13,429 18,863 13,100
Non-GAAP net loss per share $(2.02) $(1.80) $(3.15) $(3.82)
Reconciliation of GAAP loss
per share attributable to
common stockholders and non-
GAAP net loss per share:
GAAP loss per share
attributable to common
stockholders, basic and
diluted $(5.27) $(2,194.00) $(15.59) $(5,001.40)
Decrease due to items
summarized below 3.25 2,192.20 12.44 4,997.58
Non-GAAP net loss per share $(2.02) $(1.80) $(3.15) $(3.82)
GAAP weighted-average common
shares outstanding 7,561 11 3,813 10
Increase in the weighted-
average number of shares
outstanding from treating
preferred shares as if they
converted into common shares
at their date of issuance 12,210 13,418 15,050 13,090
Weighted-average shares used
in computing non-GAAP net
loss per share 19,771 13,429 18,863 13,100
(1) Non-GAAP net loss per share attributable to common stockholders and
weighted-average shares used in computing non-GAAP loss per share
attributable to common stockholders treats outstanding preferred
shares as if they were converted into common shares at their date of
issuance. Management believes that including non-GAAP net loss per
share for periods prior to and including the Company's June 2007
initial public offering provides a useful and relevant measure for
comparative year-over- year operating performance. Management does
not believe the use of non-GAAP net loss per share lessens the
importance of comparable GAAP measures. As of June 30, 2007,
24,550,554 shares of common stock were issued and outstanding.
JAZZ PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $148,000 $78,948
Restricted cash 275 275
Accounts receivable, net 6,462 5,380
Inventories 3,216 3,026
Prepaid expenses 2,655 3,447
Other current assets 547 487
Total current assets 161,155 91,563
Property and equipment, net 3,025 2,107
Intangible assets 60,952 69,140
Goodwill 38,213 38,213
Long-term restricted cash and
investments 12,085 12,000
Other long-term assets 1,440 1,548
Total assets $276,870 $214,571
LIABILITIES, CONVERTIBLE PREFERRED
STOCK, AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Line of credit $3,134 $2,191
Accounts payable 4,268 5,443
Accrued liabilities 22,198 12,943
Deferred revenue 2,027 1,422
Preferred stock warrant liability - 8,521
Total current liabilities 31,627 30,520
Deferred rent and other non-current
liabilities 452 534
Deferred revenue, non-current 13,037 13,495
Liability under government
settlement, non-current 14,881 -
Senior secured notes 74,622 74,283
Convertible preferred stock - 263,852
Common stock subject to repurchase 13,174 8,183
Stockholders' equity (deficit):
Common stock 2 -
Additional paid-in capital 366,165 1,335
Accumulated other comprehensive
income - 12
Accumulated deficit (237,090) (177,643)
Total stockholders' equity (deficit) 129,075 (176,296)
Total liabilities, convertible
preferred stock and stockholders'
equity (deficit) $276,870 $214,571
JAZZ PHARMACEUTICALS, INC.
SUMMARY OF PRODUCT SALES, NET
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Xyrem $9,628 $7,202 $18,252 $13,355
Antizol 3,987 3,007 6,623 6,138
Cystadane (1) - 245 365 732
Total $13,615 $10,454 $25,240 $20,225
(1) Jazz Pharmaceuticals, Inc. sold its rights to Cystadane to an
unrelated third party in March 2007.
Jazz Pharmaceuticals, Inc.
